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As filed with the Securities and Exchange Commission on March 2, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CAIS INTERNET, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 52-2066769
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1255 22nd Street, N.W.
Washington, D.C. 20037
(Address of Principal Executive Office, Including Zip Code)
VARIOUS WRITTEN COMPENSATION AGREEMENTS RELATING TO OPTIONS
GRANTED TO DIRECTORS AND EMPLOYEES OF CAIS INTERNET, INC.
(Full Title of the Plans)
Ulysses G. Auger, II
Chief Executive Officer and Chairman
CAIS Internet, Inc.
1255 22nd Street, N.W.
Washington, D.C. 20037
(Name and Address of Agent for Service)
(202) 715-1300
(Telephone Number, Including Area Code, of Agent for Service)
Copy to:
Morris F. DeFeo, Jr., Esq.
Morrison & Foerster LLP
2000 Pennsylvania Avenue, N.W., Suite 5500
Washington, D.C. 20006-1888
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CALCULATION OF REGISTRATION FEE
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Proposed maximum
Title of securities Amount to be registered offering price per Proposed maximum aggregate Amount of
to be registered share (1) offering price (1) registration fee
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<S> <C> <C> <C> <C>
Common Stock, $0.01 200,000(2) $ 4.31 $ 862,000 $ 227.57
par value per share 140,000(2) $ 12.00 $ 1,680,000 $ 443.52
301,420(3) $1.1942 $ 359,956 $ 95.03
1,684,343(4) $ .9732 $ 1,639,203 $ 432.75
180,000(5) $ 4.31 $ 775,800 $ 204.81
5,000(6) $ 3.07 $ 15,350 $ 4.05
48,732(7) $ .9732 $ 47,426 $ 12.52
200,000(8) $ 13.50 $ 2,700,000 $ 712.80
20,000(9) $ 12.19 $ 243,800 $ 64.36
250,000(10) $ 12.19 $ 3,047,500 $ 804.54
20,000(11) $ 12.19 $ 243,800 $ 64.36
Totals 3,049,495 $ 76.90 $11,614,835 $3,066.31
===================================================================================================================================
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(1) Estimated solely for purposes of calculating the registration fee, and
based upon the fixed exercise prices of outstanding options in accordance
with Rule 457(h) under the Securities Act of 1933, as amended (the
"Securities Act").
(2) Represents options granted to Gary Rabin pursuant to an Employment Agreement
dated as of April 8, 1999 between CAIS, Inc. and Mr. Rabin.
(3) Represents options granted to Evans K. Anderson pursuant to an Amended and
Restated Employment Agreement dated as of June 3, 1997 between CAIS, Inc.
and Mr. Anderson, as amended and assumed by the Registrant pursuant to that
certain Assignment and Assumption Agreement and Release dated as of October
2, 1998 among CAIS, Inc., as assignor, the Registrant, as assignee, and Mr.
Anderson.
(4) Represents options granted to William M. Caldwell, IV, pursuant to an
Amended and Restated Employment Agreement dated as of September 8, 1997
between CAIS, Inc. and Mr. Caldwell, as amended and assumed by the
Registrant pursuant to that certain Assignment and Assumption Agreement and
Release dated as of October 2, 1998 among CAIS, Inc., as assignor, the
Registrant, as assignee, and Mr. Caldwell.
(5) Represents options granted to Stephen Price pursuant to an Employment
Agreement dated as of March 10, 1999 between CAIS, Inc. and Mr. Price.
(6) Represents options granted to Laura Neuman pursuant to a Termination and
Release Agreement dated as of May 10, 1999 between the Registrant and Ms.
Neuman.
(7) Represents options originally granted to William M. Caldwell, IV under the
agreement described in (4) above, and assigned to Kathy Caldwell.
(8) Represents options granted to Kevin Brand pursuant to a Stock Option
Agreement dated as of November 8, 1999 between the Registrant and Mr. Brand.
(9) Represents options granted to Peter Van Horne pursuant to a Stock Option
Agreement dated as of September 2, 1999 between the Registrant and Mr. Van
Horne.
(10) Represents options granted to Wendell S. Nye pursuant to a Stock Option
Agreement dated as of September 2, 1999 between the Registrant and Mr. Nye.
(11) Represents options granted to Tom Caldwell pursuant to a Stock Option
Agreement dated as of September 2, 1999 between the Registrant and Mr.
Caldwell.
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EXPLANATORY NOTE
This registration statement has been prepared in accordance with the
requirements of Form S-8 under the Securities Act to register 3,049,495 shares
of the Common Stock of CAIS Internet, Inc., a Delaware corporation (the
"Registrant"), issuable to certain employees and directors under certain written
compensation agreements entered into by the Registrant (the "Compensation
Agreements").
PART I
The material which immediately follows constitutes a reoffer prospectus,
prepared on Form S-3, in accordance with General Instruction C to Form S-8, to
be used in connection with resales of securities acquired under the Compensation
Agreements by the participating employees and directors who may be considered
affiliates of the Registrant, as defined in Rule 405 under the Securities Act of
1933, as amended.
REOFFER PROSPECTUS
3,049,495 Shares
CAIS INTERNET, INC.
Common Stock
($.01 Par Value)
We are selling 3,049,495 shares of our Common Stock which we have previously
issued or may in the future issue under awards granted under various written
compensation agreements to our employees and directors (the "Compensation
Agreements"). These shares may be offered for resale from time to time by those
current and former employees and directors listed on Annex I (the "Selling
Stockholders").
We will not receive any of the proceeds from the sale of the Common Stock (the
"Securities"). We will pay all of the expenses associated with this Prospectus.
The Selling Stockholders will pay the other costs, if any, associated with any
sale of the Securities.
See "Risk Factors" on page 3 for a discussion of certain considerations
relevant to an investment in the securities.
Our common stock is listed on the Nasdaq National Market (Symbol: CAIS).
These securities have not been approved or disapproved by
the Securities and Exchange Commission or any state
securities commission nor has the Securities and
Exchange Commission or any state securities
commission passed upon the accuracy
or adequacy of this Prospectus. Any
representation to the contrary is
a criminal offense
The date of this Prospectus is March 2, 2000
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No dealer, salesman or any other person has been authorized by the Company to
give any information or to make any representations other than as contained in
connection with the offering described herein. This Prospectus does not
constitute an offer or a solicitation within any state to any person to whom it
is unlawful to make such offer or solicitation.
AVAILABLE INFORMATION
We have filed a Registration Statement on Form S-8 relating to the Compensation
Agreements (the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the Securities covered by this Prospectus. This
Prospectus does not contain all of the information and exhibits included in the
Registration Statement. You can obtain a copy of the Registration Statement by
paying a fee to the Commission or you may examine the Registration Statement
free of charge at the principal office of the Commission in Washington, D.C.
We are subject to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and we file reports, proxy statements and
other information with the Commission. You can inspect and copy these reports,
proxy statements and other information filed with the Commission by the Company
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the regional offices of
the Commission located at 500 West Madison Street, Room 1400, Chicago, Illinois
60661 and at 75 Park Place, 14th Floor, New York, New York 10007. You can
obtain copies of these materials from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates. You may also review electronic filings made through the
Commission's Electronic Data Gathering, Analysis, and Retrieval System on the
Commission's World Wide Web site at http://www.sec.gov. Our Common Stock is
listed on the Nasdaq National Market, and the reports, proxy and information
statements and other information filed by us with the Nasdaq National Market can
also be inspected at the offices of Nasdaq Operations, 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We have previously filed the following documents with the Commission, and they
are incorporated by reference in this Prospectus:
(1) A Report of Unscheduled Material Events on Form 8-K filed on December 27,
1999;
(2) The Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1999;
(3) A Report of Unscheduled Material Events on Form 8-K filed on September
17, 1999, as amended by a report on Form 8-K/A filed on November 12,
1999;
(4) The Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1999;
(5) The Company's prospectus dated May 20, 1999 filed pursuant to Rule 424(b)
under the Securities Act; and
(6) The description of the Company's Common Stock contained in the
registration statement filed as of May 17, 1999 under Section 12 of the
Exchange Act, including any amendment or report filed for purposes of
updating such description.
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All of the documents that we subsequently filed under Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all Securities offered by this Prospectus have been sold or
which deregisters all Securities then remaining unsold, are incorporated by
reference into this Prospectus.
Any statement which is contained in a document incorporated or considered to be
incorporated by reference in this Prospectus is considered to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document which
also is or is considered to be incorporated by reference in this Prospectus
modifies or supersedes such statement. Any such statement so modified or
superseded may not be considered, except as so modified or superseded, to be a
part of this Prospectus.
You can obtain copies of all documents which are incorporated in this Prospectus
by reference (not including the exhibits to such documents, unless such exhibits
are specifically incorporated by reference into such documents or into this
Prospectus) without charge by writing or calling us at CAIS Internet, Inc.,
Attention: General Counsel, 1255 22nd Street, N.W., Washington, D.C. 20037,
telephone number (202) 715-1300.
THE COMPANY
We are a nationwide provider of high speed Internet access solutions. We offer
cost-effective, high speed Internet access and content solutions to hotels and
multi-family properties utilizing our tier-one, nationwide Internet network and
several proprietary technologies. Our proprietary technologies for the hotel
and multi-family markets include the patented OverVoice technology, IPORT server
software and the CAIS broadband portal. We use our CyberShell Internet kiosks
to deliver high speed Internet access and content to public venues, such as
airports, retail centers, hotel lobbies and cruise ships. To maximize use of
our network, we also offer always-on, high speed Internet access to commercial
and residential customers through its digital subscriber line service,
"HyperDSL," in major metropolitan areas throughout the U.S. Our goal is to
become a leader in the provision of high speed Internet access, content,
software and systems. Our principal executive offices are located at 1255 22nd
Street, N.W., Fourth Floor, Washington, D.C. 20037, and its telephone number at
that address is (202) 715-1300. Our website is located at www.cais.com.
RISK FACTORS
This offering involves a high degree of risk. You should carefully consider the
risks and uncertainties described below and the other information in this
prospectus before deciding whether to invest in shares of our common stock. If
any of the following risks actually occur, our business, financial condition
and results of operations could be materially adversely affected. This could
cause the trading price of our common stock to decline, and you may lose part
or all of your investment.
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Our performance may be difficult to evaluate since we have had a limited
operating history during which we have incurred significant net losses,
experienced negative cash flows and accumulated a significant deficit.
Our limited historical operating data may make it more difficult for you to
evaluate our performance. We incurred a net loss for the fiscal year ended
December 31, 1997 of approximately $3.1 million, and we incurred net losses and
negative cash flows from operations for the fiscal year ended December 31, 1998
in the amounts of approximately $12.9 million and $3.2 million, respectively.
For the nine months ended September 30, 1999, we incurred net losses and
negative cash flows from operations of approximately $33.9 million and $18.0
million, respectively. On December 31, 1998, we had a stockholders' deficit of
approximately $14.8 million and on September 30, 1999 a stockholders' equity of
approximately $63.2 million.
We believe that we will incur further losses in the future, in part due to
expenses incurred in connection with our continued roll-out of OverVoice and
our other technology platforms, the expansion of our marketing and sales
organizations and the introduction of new services. We also expect that
operations in new target markets will experience losses until we establish an
adequate customer base. However, we cannot assure you that after incurring
these additional losses and expenses:
. there will be an increase in revenues;
. we will gain profits in future operating periods; or
. we will have sufficient cash available to meet continuing losses and/or
necessary capital expenditures.
Our continued growth and expansion will place substantial burdens on our
resources and personnel.
Our business strategy depends in large part on our ability to rapidly deploy
OverVoice and our other technology platforms. This growth will increase our
operating complexity as well as the level of responsibility for both existing
and new management personnel. As a result, in order to manage our growth, we
must, among other things:
. continue to implement and improve our operational, financial and
management information systems, including our billing, accounts
receivable and payables tracking, fixed assets and other financial
management systems;
. hire and train additional qualified personnel; and
. continue to expand and upgrade our network infrastructure.
We also expect that demands on our network infrastructure and technical
support resources will increase rapidly as our customer base continues to grow.
We may therefore experience difficulties meeting a high demand for services in
the future. We cannot assure you that our infrastructure, technical support or
other resources will be sufficient to facilitate this growth. As we strive to
increase network utilization, there will be additional demands on our customer
support, sales and marketing resources. Competition for qualified employees is
intense and salaries are escalating very quickly. In addition, the process of
locating such personnel with the combination of skills and attributes required
to carry out our strategy is often lengthy.
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We will need additional capital, which we may not be able to obtain.
We intend to rapidly enhance and develop our network and continue a broad-
based roll-out of OverVoice and our other technology platforms in order to
attain our business goals. We will need to seek additional financing to carry
out our growth and operating plans. We may not be able to raise cash on terms
acceptable to us or at all. Financings may be on terms that are dilative or
potentially dilative to our stockholders. If financing is insufficient or
unavailable, we will have to modify our growth and operating plans, which may
negatively affect our ability to expand our network and facilities and offer
additional services, and may adversely affect our growth and our ability to
repay our outstanding indebtedness.
Future sales of our common stock could have a negative impact on the market
price of our common stock and our ability to make future stock offerings.
Sales of a substantial number of shares of common stock in the public market,
or the appearance that such shares are available for sale, could adversely
affect the market price of our common stock and could impair our ability to
raise funds in future stock offerings. As of February 29, 2000, there were
22,942,851 shares of common stock outstanding. In the event that all or a
substantial portion of the shares of common stock under this prospectus that are
immediately available for sale are sold on any one day, such sales may have an
adverse effect on the market price of our common stock. In addition, as of
February 29, 2000, a total of 14,894,311 shares of our common stock may be
issued upon the exercise of options, warrants and convertible preferred stock.
We have granted registration rights to the holders of these securities. The sale
of common stock issued upon the exercise of these warrants and shares of
convertible preferred stock could also adversely affect the market price of our
common stock. The holders of an additional 15,581,206 shares of common stock are
also entitled to registration rights, and the sale of these securities could
further adversely affect the market price of our common stock.
In addition, we have previously registered 3,500,000 shares of common stock
issuable upon the exercise of options granted under our Amended and Restated
1998 Equity Incentive Plan and under other compensatory arrangements, which also
could adversely affect the market price of our common stock.
A third party could be prevented from acquiring your shares of stock at a
premium to the market price because of our anti-takeover provisions.
There are provisions in our certificate of incorporation and by-laws that
make it more difficult for a third party to acquire, or attempt to acquire,
control of the Company, even if a change in control would result in the
purchase of your shares at a premium to the market price.
These provisions include:
. a classified Board of Directors with staggered, three-year terms;
. the authority to issue "blank check" preferred stock;
. eliminating the ability of stockholders to act by written consent;
. eliminating the ability of stockholders to call a special meeting of the
stockholders;
. an advance notice procedure for stockholder proposals to be brought
before meetings of our stockholders; and
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. requiring a super-majority stockholder vote to effect certain
amendments.
In addition, the Delaware General Corporation Law may also discourage
takeover attempts that have not been approved by our Board of Directors.
We are required to pay ongoing royalties to Inline to use the OverVoice
technology, and any failure to do so, or otherwise meet our obligations to
Inline, could cause us to lose our exclusive right to use the OverVoice
technology.
We are required to pay Inline Connection Corporation royalties ranging
between 3.0% and 5.5% of net sales of the OverVoice technology. In the rare
cases where we do not provide the Internet access or own the OverVoice
equipment installed, this percentage may be as high as 70.0%. If we sublicense
the patents and pending patent applications relating to the OverVoice
technology to a third party, we are required to pay Inline a percentage of the
income received from the sublicense. Additionally, we have minimum annual
royalty payments starting at $100,000 in 1998 and increasing to a maximum of
$250,000 per year during the term of the agreement. If we fail to pay the
minimum payments, or otherwise breach our agreement with Inline, we will lose
our exclusive right to use the OverVoice technology in hotels and multi-family
properties which would eliminate our ability to offer many of our key services.
Technological change and evolving industry standards may render our services
noncompetitive, unnecessary or obsolete.
Our future success will depend, in part, on our ability to: (1) offer
services that address the increasingly sophisticated and varied needs of our
current and prospective customers, and (2) respond to technological advances
and emerging industry standards and practices on a timely and cost-effective
basis. Internet access operations are characterized by:
. rapidly changing and unproven technology;
. evolving industry standards;
. changing customer needs; and
. numerous competitive services and product offerings.
We cannot assure you that:
. future advances in technology will be beneficial to, or compatible with,
our business;
. we will be able to incorporate such advances on a cost-effective or
timely basis; or
. our services will be necessary and cost-effective as a result of such
advances.
Although we intend to support emerging standards, we cannot assure you that
industry standards will be established, or that, if established, we will be
able to conform to the new standards in a timely fashion or maintain a
competitive position in the market. In addition, future products, services or
technologies developed by others may render our services noncompetitive,
unnecessary or obsolete.
The market in which we operate is highly competitive, and we may not be able to
compete effectively, especially against established industry competitors with
greater marketplace presence and financial resources.
We operate in a highly competitive environment for each of our lines of
business and we believe that competition is increasing. We may not be able to
compete effectively, especially against established industry competitors with
greater marketplace presence and financial resources than ours. The competitive
environments for our different lines of business are as follows:
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OverVoice. The major groups of competitors in the business of providing high
speed Internet access to hotels and multi-family properties include:
. local exchange carriers;
. other digital subscriber line providers;
. cable TV companies and other providers using cable modems; and
. installation firms that upgrade existing wiring.
Many of these competitors have extensive marketplace presence and greater
technological and financial resources than we do.
The OverVoice technology also competes with technologies using other
transmission media, such as coaxial cable, wireless facilities and fiber optic
cable. If telecommunications service providers, hotels, multi-family properties
or single family residences install any of these alternative transmission
media, demand for OverVoice may decline.
CAIS Internet. Our principal competitors include other major providers such
as UUNET Technologies, Inc., PSINet Inc., BBN (a GTE subsidiary), and other
providers of always-on high speed Internet access including digital subscriber
line services, T-1 and wireless access. To a lesser extent, we also compete for
always-on and dial-up access and web services business with smaller, regional
Internet service providers and cable companies that operate in the same
geographic markets that we serve. Because the Internet services market has no
substantial barriers to entry, we expect that competition will continue to
intensify. Eventually, we expect some form of a market consolidation to occur,
with those Internet service providers that furnish the most value-added
solutions ultimately surviving.
Business Anywhere Centers and Internet Kiosks. There are currently two major
competitors in the marketplace providing automated business center services.
Based on the published information, Business Anywhere has the most number of
multi-purpose business center placements in business class hotels than any of
our competitors. Our two key competitors utilize the traditional technology of
individual credit card swipes hard wired to each machine. The major drawbacks
to our competitors' technology are the high cost of equipment service and
upgrading and the high initial capital cost.
As a result of increased competition and vertical and horizontal integration
in the industry, we could encounter significant pricing pressure which could
cause us to significantly reduce the average selling price of some of our
products and services. We might not be able to offset the effects of any such
price reductions with an increase in the number of our customers, higher
revenue from enhanced services, cost reductions or otherwise. Market
consolidation could result in increased price and other competition in these
industries. Increased price or other competition could result in erosion of our
market share and could have a material adverse effect on our financial
condition. We cannot assure you that we will have the financial resources,
technical expertise or marketing and support capabilities to continue to
compete successfully.
If we do not meet our obligations to deliver high speed Internet access
solutions to our customers according to schedule, our reputation will be harmed
and our revenues may be affected.
Our ability to meet the installation schedule in our agreements is critical
to our success and to our ability to generate revenues. We depend on outside
suppliers
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and vendors to install our technology in buildings, as well as on
telecommunications service providers, to install our technology in buildings,
as well as on telecommunications service providers, to install our technology
and provide services to our customers. If we fail to install our technology or
provide service on a timely basis as required by our customer agreements,
whether or not such failure is outside of our control, our ability to market
our Internet access and content solutions and, accordingly, our services would
be harmed.
We incur significant up-front costs to install our technology, which we may not
be able to recover; our agreements do not contain any minimum use requirements,
and some of our contracts are not exclusive.
We have incurred, and will continue to incur, significant up-front costs
installing OverVoice and our other technology platforms in hotels and multi-
family properties. There is no guarantee that we will be able to recover such
costs.
Because our trial and long-term agreements for both hotels and multi-family
properties generally do not contain any minimum use requirements, there is no
minimum payout that we can expect to receive. Furthermore, some of our
agreements do not require hotel owners and operators to offer our services
exclusively. As a result owners and operators could offer services that compete
with ours.
If we fail to adequately protect our intellectual property rights or face a
claim of intellectual property infringement by a third party, we could lose our
intellectual property rights or be liable for significant damages.
Our competitive advantage depends on certain domestic and foreign patents
and patent applications relating to the OverVoice technology that we license
from and jointly own with Inline Connection Corporation, as well as our
patented IPORT and Business Anywhere Center technology. Our success relies
substantially on our ability to protect our patented technology, both
domestically and abroad. We face two major risks in connection with our
intellectual property rights:
(1) Others may infringe on our intellectual property rights, resulting in:
. lack of competitiveness in the market;
. expense of time and resources to protect our patents; and
. dilution of the brand value of our service.
(2) Although we do not believe this to be the case, we may infringe others'
patents, resulting in:
. significant expense in defending our technology, even in the case of a
frivolous suit;
. requirement to pay damages; and
. costly and potentially impracticable redesign of our technology.
Because we depend upon our suppliers and have sole and limited sources of
supply for certain products and services, we are vulnerable to service
interruptions and increased costs of services.
We depend substantially on telecommunications services providers and we are
unable to control the prices for these services. For example, in order to
provide Internet access and other on-line services to our customers, we lease
long distance fiber optic telecommunications lines from national
telecommunications services providers.
Certain of our suppliers, including regional Bell operating companies and
competitive local exchange carriers, are currently subject to various price
constraints, including tariff controls, which may change in the future. In
addition, pending regulatory proposals may affect the prices they charge us.
These regulatory changes could result in increased prices for products and
services. This could reduce the profit margin for our services
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or require us to increase the prices which we charge our customers, which could
reduce the demand for our services.
We do not manufacture our proprietary OverVoice equipment, such as wall
jacks and the OverVoice DeskJack; rather, we depend on third parties to
manufacture and supply it. Any interruption in these manufacturers' operations
could adversely affect our ability to meet our customers' requirements, which
could cause them to use our competitors' services.
We rely on other companies to supply our network infrastructure, some of which
may compete directly with us or enter into arrangements with our competitors.
We rely on other companies to supply our network infrastructure (including
telecommunications services and networking equipment) which, in the quantities
and quality we require, is available only from sole or limited sources. We are,
therefore, vulnerable to the possibility that our suppliers may:
. compete directly with us;
. enter into exclusive arrangements with our competitors; or
. stop selling their products or components to us at commercially
reasonable prices, or at all.
The Internet relies on the exchange of traffic over a network of networks
that is owned and operated by many parties. We currently exchange traffic with
other Internet service providers with whom we maintain relationships. These
exchange agreements are not regulated and may be changed. If they become
regulated, modified or are altogether terminated, we may have to find
alternate, more expensive means to exchange traffic, or we may not be able to
do so, which could limit our ability to offer services in a particular market
or increase the cost of our services, which could reduce the demand for these
services.
A system failure could cause interruptions in the services we provide to our
customers.
Our operations depend upon our ability to protect our network against damage
from acts of nature, power failures, telecommunications failures and similar
events. Because we lease our lines from long-distance telecommunications
companies, Internet providers, the regional Bell operating companies and
competitive local exchange carriers, we depend upon those companies for
physical repair and maintenance of those lines. Despite the precautions we and
our telecommunications providers take, the occurrence of a natural disaster,
fire, electrical outage or other unanticipated problems at one of our
facilities may cause interruptions in the services we provide. Such
interruptions in operations could limit our ability to meet our customers'
requirements and reduce the demand for our services.
Viruses, break-ins and other security breaches could cause interruptions,
delays or a cessation of the services we provide to our customers.
Despite the implementation of network security measures, the core of our
Internet network infrastructure is vulnerable to computer viruses, break-ins
and similar disruptive problems. We may experience future interruptions in
service as a result of the accidental or intentional actions of Internet users,
current and former employees or others. Unauthorized use could also potentially
jeopardize the security of confidential information stored in our computer
systems and the computer systems of our customers. Although we intend to
continue to implement security measures to prevent this, these measures have
occasionally been circumvented in the past, and the possibility exists that the
measures we implement will be circumvented in the future. In addition,
eliminating such viruses and remedying such security problems may cause
interruptions, delays or cessation of service to our customers. If our security
measures fail, we may lose subscribers or be sued, resulting in additional
expenses and reduced profitability. We do not carry any insurance against these
risks because it is unavailable at a reasonable cost.
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The loss of our key personnel, or failure to hire additional personnel, could
harm our business because we would lose experienced personnel and new skilled
personnel are in short supply and command high salaries.
Our success depends in significant part upon the continued service and
performance of our senior management personnel and other employees who possess
longstanding industry relationships and technical knowledge of our operations.
While we do not maintain any "key person" insurance, we have entered into
employment agreements with key employees. Our future success also depends on
our ability to attract, train, retain and motivate highly skilled personnel. To
date, we have successfully attracted and retained qualified, high-level
personnel; we have not had to devote significant time and resources recruiting
such personnel; and personnel turnover has not affected our development
efforts. However, competition for qualified, high-level telecommunications
personnel is intense and we cannot assure you that we will be able to continue
to attract and retain such talent. The loss of the services of one or more of
our key individuals, or the failure to attract and retain additional key
personnel, could limit our ability to market our services, manage our growth
and develop and achieve our business objectives.
Because we are an internet service provider, we may become subject to
application of telecommunications laws to services provided over the internet.
As an Internet service provider, we are not currently subject to direct
regulation by the Federal Communications Commission ("FCC"). Nevertheless,
Internet-related regulatory policies are continuing to develop and vigorous
public debates regarding the costs and benefits of regulating the Internet have
emerged in federal, state and local legislative, executive and regulatory
agency forums. It is possible that we could be exposed to regulation as a
telecommunications service provider in the future. For example, the FCC has
stated its intention to consider whether to regulate voice and fax telephony
services provided over the Internet as "telecommunications" even though
Internet access itself would not be regulated; and the FCC recently initiated a
Notice of Inquiry to examine this issue. The FCC is also considering whether
such Internet-based telephone service should be subject to universal service
support obligations, or pay carrier access charges on the same basis as
traditional telecommunications companies.
Local telephone companies assess access charges to long distance companies
for the use of the local telephone network to originate and terminate long
distance calls, generally on a per-minute basis. Access charges have been a
matter of continuing dispute, with long distance companies complaining that the
rates are substantially in excess of cost, and local telephone companies
arguing that access rates are justified to subsidize lower local rates for end
users and other purposes. Both local and long distance companies, however,
contend that Internet-based telephony should be subject to these charges. We
have no current plans to install gateway equipment and offer telephony, and so
we do not believe we would be directly affected by these developments However,
we cannot predict whether these debates will cause the FCC to reconsider its
current policy of not regulating Internet service providers.
A decision by Congress or the FCC to regulate Internet telephony or Internet
access services may limit the growth of the Internet, increase our cost of
doing business or increase our legal exposure, any of which could cause our
revenues to decrease.
A governmental body could impose sales and other taxes on the provision of our
services, which could increase our costs of doing business.
A number of federal, state and local government officials have asserted the
right or indicated a willingness to impose taxes on Internet-related services
and commerce, including sales, use and access taxes. We cannot accurately
predict whether the imposition of any such taxes would materially increase our
costs of doing business or limit the services we provide.
12
<PAGE>
We may be liable for information sent through our network.
As an Internet service provider, we may be liable for content and
communications provided by third parties and carried over, or hosted on, our
facilities. Because the law of Internet service provider liability is uncertain
and in a constant state of change, our actual exposure for third-party content
cannot be predicted.
One area of potential liability is copyright and trademark infringement. We
may be found liable for third-party communications that infringe a trademark or
copyright, and we are obligated to comply with the requirements of the Digital
Millennium Copyright Act concerning responses to claims of copyright
infringement.
We also may be liable for obscene, indecent or otherwise offensive
communications carried over our facilities. Although the Communications Decency
Act, enacted in 1996, was found by the courts to be unconstitutional as applied
to indecent speech, in 1998 the Congress passed another statute intended to
prohibit indecent communications over the Internet. That more recent statute
was declared to be unconstitutional, but a federal court of appeals is hearing
a pending challenge to that decision. Depending upon the outcome of that
proceeding, we may be exposed to potential liability for indecent material
carried over our facilities.
We also are required to comply with state and federal privacy requirements,
including the Electronic Communications Privacy Act ("ECPA") and the Children's
Online Privacy Protection Act ("COPPA"). The ECPA imposes limitations on the
interception, disclosure and use of communications transmitted over and stored
on our facilities. COPPA, and the Federal Trade Commission rules implementing
that statute, requires us to safeguard personal information that we know to be
transmitted to our website by children under 13.
We also are subject to federal and state laws that regulate the advertising
and sale of certain products and services over the Internet. In addition to
existing statutes of this kind, such as state statutes that prohibit
advertisement of gambling, a number of bills are pending in the Congress and
state legislatures that would prohibit or regulate particular marketing
practices (such as the transmission of unsolicited commercial email) or the
advertisement or sale of certain goods and services. We cannot predict the
impact of these potential laws upon our business.
While no one has ever filed a claim against us concerning content carried
over our service, someone may file a claim of that type in the future and may
be successful in imposing liability on us. If that happens, we may have to
spend significant amounts of money to defend ourselves against these claims
and, if we are not successful in our defense, the amount of damages that we
will have to pay may be significant. Any costs that we incur as a result of
defending these claims or the amount of liability that we may suffer if our
defense is not successful could materially adversely affect our profitability.
If, as the law in this area develops, we may decide to take steps to reduce
our exposure to for information carried on, stored on or disseminated through
our network. This may require us to spend significant amounts of money for new
equipment and may also require us to discontinue offering certain of our
products or services or modify existing arrangements to mitigate potential
liability.
We may not be able to protect our trademarks which could hamper our ability to
market our products and services.
Our success is dependent in part on recognition of our name and trademarks,
such as "CAIS," "OverVoice", IPORT and "Business Anywhere" and pending
trademarks, such as "DeskJack." We intend to protect and defend our name,
servicemarks and trademarks in the United States and internationally. We
achieved federal registration for several of our trademarks, including the mark
CAIS, and filed for federal trademark protection for a number of other marks
which we use or intend to use, for example "DeskJack." However, we cannot
assure you that:
. our efforts to protect our proprietary rights in the United States or
abroad will be successful;
13
<PAGE>
. our use of our trademarks and servicemarks will be free from legal
challenges; or
. we will have sufficient funds to withstand such challenges or claims,
regardless of their merit.
If we are unable to protect our proprietary rights, it could seriously
affect our ability to market our products and services. In addition, legal
challenges to our proprietary rights could lead to a substantial diversion of
our limited resources.
Our executive officers and directors, as a group, control CAIS Internet.
Our executive officers and directors, as a group, beneficially own or
control approximately 50.5 % of the outstanding shares of our common stock on a
fully diluted basis. Consequently, as a practical matter, our executive
officers and directors, as a group, are able to control all matters requiring
approval by our stockholders, including the election of our Board of Directors,
management policy and all fundamental corporate actions, including mergers,
substantial acquisitions and dispositions of assets. Please see "Principal
Stockholders" for information about the ownership of common stock by our
executive officers, directors and principal stockholders.
Failure to obtain Year 2000 compliance could cause an interruption in, or a
failure of, our normal business activities and operations.
The term "Year 2000 issue" is a general term used to describe the various
problems that may result from the improper processing of dates and date-
sensitive calculations by computers and other machinery as the year 2000 is
approached, reached and passed. Our failure to correct a material Year 2000
problem could result in an interruption in, or a failure of, our normal
business activities or operations. During 1998, we established a Year 2000
compliance program to coordinate appropriate activity and report to our Board
of Directors with regard to Year 2000 issues. We continue to assess the impact
of Year 2000 issues on our internal computer, operational and financial
systems, and to review with our key vendors and suppliers and the compliance of
their systems with Year 2000 processing requirements. We currently believe that
our most likely worst case scenario related to the Year 2000 is associated with
potential concerns with our customers' and suppliers' Internet operations. The
failure of such parties to ensure Year 2000 compliance could lead to decreased
Internet usage and the delay or inability to obtain necessary data
communication and telecommunication capacity. These factors could result in
delay or loss of revenue, interruption of network services, cancellation of
customer contracts, diversion of development resources, damage to CAIS
Internet's reputation and litigation costs.
14
<PAGE>
SELLING STOCKHOLDERS
The table attached to this Prospectus as Annex I describes, as of the date of
this Prospectus or a subsequent date if amended or supplemented, (a) the name of
each Selling Stockholder and his or her relationship to us during the last three
years; (b) the number of shares of Common Stock each Selling Stockholder
beneficially owned prior to this offering, (c) the number of Securities which
may be offered pursuant to this Prospectus by each Selling Stockholder; and (d)
the amount and the percentage of our Common Stock that would be owned by each
Selling Stockholder after completion of this offering. The information
contained in Annex I may be amended or supplemented from time to time.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the Securities offered
by this Prospectus.
PLAN OF DISTRIBUTION
Sales of the Securities offered by this Prospectus may be made on the Nasdaq
National Market or the over-the-counter market or otherwise at prices and on
terms then prevailing or at prices related to the then current market price, or
in negotiated transactions. In addition, any securities covered by this
Prospectus which qualify for sale under Rule 144 may be sold under Rule 144
rather than under this Prospectus. We will not receive any part of the proceeds
of the sales made under this Prospectus. We are paying all other expenses
associated with this Prospectus, but each Selling Stockholder is paying his or
her own selling and other expenses.
The Securities may be sold in (a) a block trade in which the broker or dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction, (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account under this Prospectus, (c) an exchange distribution in accordance with
the rules of such exchange, and (d) ordinary brokerage transactions and
transactions in which the broker solicits purchases. In effecting sales,
brokers or dealers engaged by the Selling Stockholders may arrange for other
brokers or dealers to participate. Certain Selling Stockholders also may, from
time to time, authorize underwriters acting as their agents to offer and sell
Securities upon such terms and conditions as shall be set forth in any
prospectus supplement. Underwriters, brokers or dealers will receive
commissions or discounts from Selling Stockholders in amounts to be negotiated
immediately prior to sale. Such underwriters, brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any discounts
and commissions received by them and any profit realized by them on the resale
of the Securities may be deemed to be underwriting discounts and commissions
under the Securities Act.
The amount of Securities to be reoffered or resold pursuant to this Prospectus
by each Selling Stockholder and any other person with whom he or she is acting
in concert for the purpose of selling our securities, may not exceed, during any
three-month period, the amount specified in Rule 144(e) of the Securities Act.
We cannot ensure that any of the Selling Stockholders will offer for sale or
sell any or all of the Securities covered by this Prospectus.
15
<PAGE>
<TABLE>
<CAPTION>
ANNEX I
Shares of Common Shares to be Beneficially
Stock Beneficially Shares Owned upon Completion of
Owned Prior to Offered Offering(1)(2)
Relationship to Company March 2, by Selling ------------------------------
Selling Stockholder During Last Three Years 2000(1) Stockholder Number Percent
- ------------------- ----------------------- --------- ----------- ------ -------
<S> <C> <C> <C> <C> <C>
Gary Rabin Executive Vice President 340,000 340,000 340,000 1.3
of Finance and Strategic
Planning
Evans K. Anderson Executive Vice President of 301,420 301,420 301,420 1.2
Sales and Marketing and Chief
Operating Officer
William M. Caldwell, IV President and Director 1,684,343 1,684,343 1,684,343 6.5
Stephen Price Vice President of Business 180,000 180,000 180,000 *
Development
Laura Neuman Former Vice President of Sales 5,000 5,000 5,000 *
Kathy Caldwell Not Applicable 48,732 48,732 48,732 *
Kevin Brand Executive Vice President 200,000 200,000 200,000 *
of Operations
Peter Van Horne Vice President of Research 20,000 20,000 20,000 *
and Development
Wendell S. Nye President, CAIS Software 250,000 250,000 250,000 *
Solutions, Inc.
Tom Caldwell Vice President of Engineering 20,000 20,000 20,000 *
* Less than one percent.
</TABLE>
(1) Assumes that all options to acquire shares are exercisable.
(2) Assumes that all outstanding options are exercised and all shares
offered hereby are sold, that no additional shares will be acquired and
that no shares other than those offered hereby will be sold.
16
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by CAIS Internet, Inc. (the "Registrant")
with the Securities and Exchange Commission (the "Commission") are incorporated
by reference herein:
(a) The Registrant's prospectus dated May 20, 1999 filed pursuant to Rule
424(b) under the Securities Act, which contains audited financial statements
for the Registrant's latest fiscal year for which such statements have been
filed.
(b) All reports filed pursuant to Sections 13(a) or 15(d) of the Exchange
Act since the end of the fiscal year covered by the prospectus referred to
in (1) above.
(c) The description of the common stock of the Registrant, $.01 par value
per share (the "Common Stock"), contained in the registration statement
filed as of May 17, 1999 under Section 12 of the Exchange Act, including any
amendment or report filed for purposes of updating such description.
All documents filed by the Registrant with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference into this Registration Statement and to be a
part hereof from the date of filing of such documents. Any statement contained
in a document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), which permits a corporation in its certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(1) for any breach of the director's fiduciary duty of loyalty to the
corporation or its stockholders, (2) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3) pursuant
to Section 174 of the DGCL (providing for liability of directors for unlawful
payment of dividends or unlawful stock purchases or redemptions), or (4) for any
transaction from which the director derived an
17
<PAGE>
improper personal benefit. The Registrant's Certificate of Incorporation
contains provisions permitted by Section 102(b)(7) of the DGCL.
Reference is made to Section 145 of the DGCL which provides that a
corporation may indemnify any persons, including directors and officers, who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person is or was a director,
officer, employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided such director, officer, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, with respect to any criminal actions or
proceedings, had no reasonable cause to believe that his conduct was unlawful.
A Delaware corporation may indemnify directors and/or officers in an action or
suit by or in the right of the corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the director
or officer is adjudged to be liable to the corporation. Where a director or
officer is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him or her against the
expenses which such director or officer actually and reasonably incurred.
The Registrant's Certificate of Incorporation filed as Exhibit 4.1 to this
Registration Statement provides indemnification of directors and officers of the
Registrant to the fullest extent permitted by the DGCL.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
The Exhibit Index immediately preceding the exhibits is incorporated herein
by reference.
Item 9. Undertakings.
a. The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the
18
<PAGE>
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table herein; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
b. The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be in the
initial bona fide offering thereof.
c. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, CAIS Internet, Inc., certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Washington, D.C., on March 2,
2000.
CAIS INTERNET, INC.
By: /s/ Ulysses G. Auger, II
------------------------
Ulysses G. Auger, II
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Ulysses G. Auger, II, and Michael Plantamura, and each of them, as attorneys-in-
fact, each with the power of substitution, for him in any and all capacities, to
sign any amendment to this Registration Statement and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting to said attorneys-in-fact, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming the
said attorney-in-fact or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
20
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>
/s/ Ulysses G. Auger, II Chief Executive Officer, March 2 , 2000
- -------------------------------- Chairman of the Board
Ulysses G. Auger, II and Director (Principal
Executive Officer)
/s/ Barton R. Groh Chief Financial Officer March 2 , 2000
- -------------------------------- (Principal Financial and
Barton R. Groh Accounting Officer)
/s/ Ulysses G. Auger, Sr. Director March 2 , 2000
- --------------------------------
Ulysses G. Auger, Sr.
/s/ William M. Caldwell, IV President and Director March 2 , 2000
- --------------------------------
William M. Caldwell, IV
/s/ Richard F. Levin Director March 2 , 2000
- ---------------------------------
Richard F. Levin
/s/ Vernon Fotheringham Director March 2 , 2000
- ---------------------------------
Vernon Fotheringham
/s/ S. Theodore Ammon Director March 2 , 2000
- ---------------------------------
S. Theodore Ammon
</TABLE>
21
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
Number Description
5.1 Opinion of Morrison & Foerster LLP
23.1 Consent of Morrison & Foerster LLP (included in Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Arthur Andersen LLP
24.1 Power of Attorney (included on the signature page of this Registration
Statement)
<PAGE>
Exhibit 5.1
-----------
MORRISON & FOERSTER LLP
2000 Pennsylvania Avenue, Suite 5500
Washington, D.C. 20006-1888
202-887-1500 * FAX 202-887-0764
March 2, 2000
CAIS Internet, Inc.
1255 22nd Street, N.W.
Washington, D.C. 20037
Re: Various Written Compensation Agreements Relating to Options Granted
to Current and Former Employees and Directors of CAIS Internet, Inc.
(the "Compensation Agreements")
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-8
executed by you on March 2, 2000, and to be filed with the Securities and
Exchange Commission in connection with the registration under the Securities Act
of 1933, as amended (the "Securities Act"), of an aggregate of 3,049,495 shares
of your common stock, $.01 par value (the "Common Stock"), which will be
issuable under the Compensation Agreements.
As your counsel in connection with the Registration Statement, we have examined
the proceedings taken by you in connection with the adoption of the Compensation
Agreements by CAIS Internet, Inc., and such documents as we have deemed
necessary to render this opinion, in connection therewith.
Based upon the foregoing, it is our opinion that the Common Stock, when issued
and outstanding pursuant to the terms of the Compensation Agreements, will be
validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act. In giving such
consent, we do not hereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission.
Very truly yours,
/s/ Morrison & Foerster LLP
<PAGE>
Exhibit 23.2
------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
CAIS Internet, Inc. on Form S-8 of our report dated October 22, 1999 on the
financial statements of ATCOM, Inc. appearing in the Form 8-K/A of CAIS
Internet, Inc. dated November 12, 1999.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
San Diego, California
March 1, 2000
<PAGE>
Exhibit 23.3
------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our report dated
February 19, 1999 (except with respect to the matters discussed in Note 15 to
the consolidated financial statements, as to which the date is May 16, 1999)
included in CAIS Internet, Inc.'s registration statement on Form S-1 (File No.
333-72769) and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
Vienna, Virginia
February 29, 2000
